Govt raises power prices to match generation cost

Karachi: Federal government led by Pakistan Muslim League-nawaz (PML-N) on Tuesday raised electricity prices to match rising generation costs amid a global energy crisis and a heatwave, even as the country grapples with its highest inflation in over a decade, the power minister said.

Inflation last month reached 21.3%, driven mainly by rising food costs, and the country also faces fast-depleting foreign reserves, a depreciating currency and widening current account deficit.

“Cabinet has approved an increase in electricity tariffs but lifeline (poor) consumers will not be affected,” Power Minister Khurram

Dastagir Khan told reporters in Islamabad, adding that the increase would not apply to them.

Pakistan’s monthly fuel oil imports are set to hit a four-year high in June, Refinitiv data shows, as the country struggles to buy liquefied natural gas for power generation amid a heatwave that is driving demand.

Higher energy imports have hit the economy as the country struggles to boost foreign exchange. The rupee has lost 20% of its value in 2022. Reserves have fallen to as low as $9.3 billion, hardly enough to pay for 45 days of imports.

Pakistan this month reached a staff-level agreement with the IMF for $1.17 billion in critical funding under a resumed bailout package.

The country is also pushing to tap other avenues for power. The minister said that nuclear power production had risen ater the refuelling of one plant.

From the beginning of July, the K2 plant has been operating at full capacity.

The PML-N is smelling a rat and is thus reviewing its political narrative with the possibility that it may again revert to its “respect the vote” stance, said a report.

Upset with some “disturbing signals” it is geting from relevant quarters, PML-N supremo and former prime minister Mian Nawaz Sharif is currently reviewing the situation with the possibility of returning to the party’s tough stance vis-a-vis the policy of certain institutions.

The report said it was also under consideration that Sharif should restart his public interaction, both with the media and public. “We did not want the government and were eager to go for fresh elections in May this year but were told to continue in the best interest of the country,” it quoted a party source as saying, who added that later the PML-N-LED ruling coalition took a tough and unpopular decision to save Pakistan from default. But now things are being pushed for fresh elections to the complete disadvantage of the ruling parties, particularly the PML-N.